HBA-EDN H.B. 679 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 679
By: Homer
Ways & Means
4/19/2001
Introduced



BACKGROUND AND PURPOSE 

Small businesses are an integral part of the economy.  However, many small
businesses may find it difficult to flourish and expand, particularly in
the face of rising costs and taxes.  Allowing these businesses to take a
deduction on franchise taxes may help to alleviate the financial burden on
these businesses and thereby stimulate economic growth in the state.  House
Bill 679 authorizes a corporation to take a franchise tax deduction for a
certain amount from its taxable capital or taxable earned surplus. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 679 amends the Tax Code to authorize a corporation to deduct
from its taxable capital and from its taxable earned surplus an amount
equal to the lesser of: 

_$100,000;

_the amount of the corporation's gross receipts from its entire business
for taxable capital or for taxable earned surplus, including items of
income generated outside this state that are subject to allocation to the
state of commercial domicile; 

_the amount of the corporation's taxable capital; or

_the amount of the corporation's taxable earned surplus.

EFFECTIVE DATE

January 1, 2002.